Check out our 6 tips on writing an effective proposal letter

In today’s business world, effective communication is important, especially if you have a lucrative business idea or innovative project to propose to key stakeholders. And this is where a well-drafted proposal letter comes in. 

In this blog post, we’ll discuss:

• The importance of a proposal letter

• How to write a proposal letter

What is a proposal letter?

The primary purpose of a proposal letter is to introduce an important business idea or project to someone in a position to approve the idea. For example, if you’re running a small business and you wish to apply for funds to venture into a new market, you will need to write a proposal letter to convince the investors to invest in your business. 

Proposal letters are often considered to be the first impression of your organization to an external party. A clear and well-written letter will likely denote professionalism on your part, and it could potentially convince the reader to make their decision in your favor. 

Contrary to popular belief, there’s no cookie-cutter approach to writing a proposal letter. After all, the letter will depend on the target audience and the reason it is being written. A proposal letter to request funds will be different from a letter written in response to a tender notice.

How do you write a proposal letter?

Like all other business documents, a proposal letter has an intent and a value proposition. Here are six tips on writing an effective proposal letter:

1. Talk about yourself first

The first paragraph of your proposal letter is the most crucial one. It’s an opportunity for you to introduce yourself and make a positive impression on the reader. Provide some basic information about your organization and a brief overview of the topics you’re intending to cover in the letter. If you’ve had prior correspondence with the reader or the reader has a professional relationship with your business, mention it. 

2. Indicate the reason clearly

The purpose of a proposal letter is just as important as the introduction. Communicate the reason you’re writing this letter—be it a request for funds or a willingness to address some of the problems the reader is experiencing. If your objective is to solve the recipient’s problem, show your understanding of the problem and how you’ve helped other organizations manage similar problems. 

3. State the objective(s)

When you’re describing the short-term and long-term goals you intend to achieve, be very specific. Talk about how you can help the recipient and deliver tangible results for them. Whenever possible, use specific metrics and describe the positive outcomes you can deliver.  

4. Provide your value proposition

If you’re writing a proposal letter to request funds, let the recipient know what makes you qualified for this additional investment. What are some of the major strides you’ve made in the industry? How will you ensure the additional capital will be used in business operations and generate a positive ROI for the lender? 

Similarly, if you’re writing a proposal letter to respond to a tender notice, discuss some of the major projects you’ve completed in the past and how your services set you apart from the others. What kind of guarantee do you offer on your work? What are some of the biggest clients you’ve worked with? How did you help your clients address some of the issues they faced?

5. Clearly explain the next steps

Whether you’re writing a proposal letter to request funds or to undertake a new project, cost is a major factor worth considering. The recipient will likely make the decision in your favor if you let them know how you will use the funds and ensure timely repayment or how you will complete the project.

If you’re applying for funds, you may need to disclose your financial statements to show your ability to repay the loan. Also, add details on how the additional funds will be used and how the loan will be repaid. Similarly, if you’re writing a letter in response to a tender notice, include a statement of work and estimates of resources and cost of the project. 

6. Add a call to action

In the context of proposal letters, a call to action (CTA) denotes urgency and provides the recipient with clear instruction on what to do next. Having a CTA can increase the likelihood of the recipient responding to your proposal letter.

A call to action also indicates your intention to follow-up with the recipient, showing that you’re serious about the proposal. Let the reader know about the specific date and time you will touch base with them again. Finally, thank the recipient for their time and consideration. It’s always best to end on a positive note.

What is the format of a simple proposal letter?

Proposal letters are written for a wide variety of reasons. Here’s a sample proposal letter to give you an idea on how to write one:

A well-written proposal letter can open up many opportunities. If you need help exploring options and planning your professional journey, check out our Career Pathways tool. 

Key takeaways

1. Proposal letters are generally written to convey business ideas to key decision-makers.

2. A well-written proposal letter could lead to a decision in your favor.

3. Before writing a proposal letter, make sure you’re clear on the intent of the document.